- UK has launched its CfD AR5 for low carbon energy technologies with a total budget of £205 million
- Solar PV projects of over 5 MW capacity have been placed under pot 1 with other established technologies
- It has been allocated a maximum administrative strike price of €0.047/kWh
The Government of United Kingdom (UK) is inviting applications from low-carbon projects under its contracts for difference (CfD) allocation round 5 (AR5) including for solar PV projects of more than 5 MW capacity, for a total budget of £205 million ($252.5 million).
To be selected under 2 groups called technology pots, solar will compete with hydro, landfill gas, offshore and onshore wind, remote island wind, sewage gas and energy from waste with CHP as part of pot 1.
Dedicated biomass with CHP, floating offshore wind, geothermal, tidal stream and wave energy have been pitted against each other under pot 2.
Strike price for solar PV is capped at £0.047/kWh, just ahead of £0.044/kWh for offshore wind which is the lowest administrative strike price for all participating technologies in this round.
Calculated in ‘real terms on the basis of a 2011/12 price level’, the overall monetary budget includes £170 million ($209 million) for established technologies under pot 1 and £35 million ($43 million) for emerging technologies under pot 2.
“The changes to the AR5 contract include changes to prevent generators from delaying their CfD Start Date for their commercial gain, at the expense of consumers, by avoiding CfD payments to LCCC at times of high electricity prices,” stated the government.
Launched on March 30, 2023, applications can be submitted for AR5 round till April 24, 2023. Details are available on the National Grid ESO website.
This also happens to be the 1st CfD round that will be held annually, instead of every 2 years, a move that was cleared in response to industry demands for frequent auctions for a clearer visibility of the pipeline and investment horizon.
Under AR4, concluded in July 2022, UK contracted close to 11 GW renewable energy capacity for 15-year contracts, including more than 2.2 GW solar PV capacity. For solar PV, the strike price achieved was £0.04599/kWh as against the cap of £0.047/kWh (see UK’s CfD Round 4 Secures ‘Almost’ 11 GW RE).
At the end of February 2023, UK’s total installed solar capacity was 14.8 GW, having increased by 5% or 708 MW since February 2022, according to the Department of Energy Security and Net Zero and the Department for Business, Energy & Industrial Strategy (BEIS).
UK solar energy association Solar Energy UK has welcomed the government’s pledge to set up a joint taskforce and roadmap to drive the growth of solar energy in the country as it aims for 70 GW solar capacity by 2035 (see Britain Releases New Energy Security Strategy).